Enlightenment Through Understanding

A systems-based approach to rationalism

May 28, 2017

Most discussions of rationalism involve the study of cognitive biases, personality, and human behavior, but, imho, a ‘systems/logical’ approach to rationalism is more propitious than understanding cognitive biases and human behavior.

I believe that rationalism is to choose the optimal choice of all available options. Once one acquires an understanding of the fundamentals of an underlying system, one can optimize their life around such an understanding. The global economy is a system, that like math, has rules. This even overrides the problem of human irrationality, because although individuals may behave irrationally and are guided by emotion, systems very seldom are, and because there are far fewer system than people, systems are easier to generalize. To an outsider, it’s like precognition (but it’s no different than knowing 3+3=6 is ‘true’ without having to verify it empirically, yet people treat fundamental law of nature and the economy as being distinct). So understanding the world as an arrangement of systems that seek to optimize capital, instead of a system of individuals, is a major advantage. So I think Marx is right in this regard about the centrality of capital, and Adam Smith is right about the ‘invisible hand’, but Marx is wrong about exploitation and capitalism being self-limiting, and I am not sure that the invisible hand implies ‘optimally good outcomes’, but rather describes autonomous nature of the economy as a system of competing agents.

Even though I tend to reject the ‘blank slate’, it is possible to train oneself to become more rational, by attaining a ‘deep understanding’ of large systems. It took me about a decade to get here, with most of the progress made in the past 2 years. Economies are large systems that interact in such a way as to maximize capital. If you understand how economies and capital work, one can make good investment decisions and correct predictions. Knowing cognitive biases can help, but sometimes a rational decision is one that may seem irrational (such as buying Bitcoin, even though many says it’s a bubble).